Howard sounds tax warning

Michael Howard today delivered his bleakest warning yet that the Conservatives may not be able to offer income tax cuts at the next General Election.

In an exclusive interview with the Evening Standard, the Conservative leader said the public sector reforms he is planning would cost more money at first and warned there was also a question over economic growth. "The first thing you have got to decide after you have done all the sums and calculated how much it is likely to cost you to put in place your reforms is what overall scope there is for cutting taxes at all," he said.

"We will see where that leads us. I am not sitting here today and saying we will definitely be able to cut the standard rate of income tax.

"I would love to be able to say that but I'm not saying we will necessarily be able to."

His intervention appeared to settle a fierce shadow cabinet row between modernisers nervous of spending cuts and hawks calling for a Margaret Thatcher-style pledge to slash tax rates.

Mr Howard is expected to spell out his cautious approach in a keynote speech in Harrogate this month.

He said growing public cynicism about politicians meant it was no longer possible to promise lower taxes unless the Tories could also spell out in detail where the money would come from.

"We know people are suspicious about politicians and don't like taking things on trust," he said.

"We won't offer tax cuts unless and until we can explain to people where we have found the money to pay for those tax cuts."

After three months as Opposition leader, Mr Howard weighed into the London mayoral elections.

He said Ken Livingstone's congestion charge should be scrapped because it risked turning London into a "ghost town".

He denied that he urged Tory mayoral candidate Steve Norris to give up his part-time job as chairman of controversial rail company Jarvis and insisted Mr Norris's business career made him a better choice for the capital. And he pledged the Tories would find new ways to finance the longdelayed Crossrail scheme.

Mr Howard also defended his decision to back the new inquiry into the intelligence before the Iraq war against critics who have accused him of endorsing a potential whitewash.

But he said it was time for the Tories to move on from the Hutton report to bread and butter issues like education, saying: "We are not going to carry on talking about weapons of mass destruction forever."